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15 December 2020

How Covid-19 shaped the home delivery market in 2020 and what’s in store for 2021

Intersoft's Managing Director, James Thomas, reflects on the impact of Covid-19 on home delivery and eCommerce in 2020 and looks ahead to what's instore for the sector in 2021.

James Thomas

In 2020 Covid-19 has impacted many areas of our lives and even consumer shopping habits have changed as a direct result of the pandemic. With national lockdowns and social distancing measures in place, more and more of the UK population has been driven online, leaving the already struggling High Street in even greater trouble. As eCommerce has boomed, so has the demand for home delivery. This is reflected in our customer data which shows that 78% of Intersoft’s eCommerce customers saw a growth in shipment volumes in 2020. Retailers that had the capability to respond rapidly to the sudden influx in online demand driven by Covid-19, through scalable technology and automation processes, were undoubtedly in a better position to capitalise on this significant growth in online orders.

Here are my reflections on the whirlwind that was 2020 and thoughts on what is to come for home delivery and eCommerce in 2021…

Warehouse parcel selection

Flexibility was key to retailer survival

Even before the Covid-19 pandemic, online retail has continued to grow while High Street footfall has dipped. And the contrast between the two has certainly been magnified in 2020. A new report from IBM Retail shows the move from High Street to online retail has been accelerated by more than five years due to the pandemic.

What we’ve seen this year, is that retailers that were able to quickly fulfil orders and utilise all areas of the supply chain to meet the sudden surge in online demand were better placed to weather the storm Covid-19 has created for retail. Bricks and mortar shops have had to embrace the scope of omnichannel fulfilment capabilities – such as click-and-collect or ship-from-store – to remain competitive in the new retail landscape and support retailers’ warehouse capacity.

Stable, scalable technology platforms that help automate the despatch process – whether from a store or warehouse – are key to improving delivery times and maximising sales opportunities.

 


How we helped Waterstones ship from store

Earlier this year, Intersoft worked with book retailer Waterstones to help it utilise its High Street stores as remote distribution centres for its online business. With social distancing measures in force in its warehouse and an increase in shoppers looking for books, magazines and games to entertain themselves during the lockdown period, the retailer enlisted the help of our ship-from-store functionality to ensure stability and offer consumers confidence and reliable services across the Waterstones group of websites. Intersoft’s Intelligent Shipper® API was rapidly integrated across the retailer’s nationwide stores, allowing Waterstones to print shipping labels and despatch goods from individual high street shops.

 


Happy delivery man

Successful partnerships have overcome delivery challenges

It is not just retailers that have felt the pressure from the increase in demand for home delivery. Third-party logistics firms (3PLs) and fulfilment houses have also been under immense strain. Greater demand for home delivery, overstretched carriers, and the complexity of social distancing measures, have made 2020 a challenging year for 3PLs. Those with the tools in place to simplify integrations between customers and a variety of carriers, were able to streamline operations in 2020 and better fulfil demand.

 


How our successful partnership helped deliver PPE

Developing the right partnerships with all parties in the supply chain has also been immensely important during the pandemic and has helped retailers, carriers and fulfilment houses alike overcome these challenges. Take Clipper Logistics and eBay as an example. They’ve rallied together to develop an eCommerce platform for the NHS Supply Chain, Ministry of Defence and Social care sectors, that allows GPs, small Social Care homes and Home Care providers to quickly access much needed PPE equipment. To date, the eBay PPE Portal has shipped 325 million items to frontline staff with these volumes continuing to rise. I’m delighted to add that Intersoft’s Intelligent Shipper® solution has been instrumental in this partnership, seamlessly integrating into Clipper Logistics’ warehouse solution to enable the shipment of these items from its warehouse via Royal Mail.

 


Woman inspecting medicine at home

Some sectors have felt the pressure more than others

While convenient and reliable shipping methods are ‘a nice to have’ for many areas of online retail, in some sectors reliable delivery times are essential to shoppers’ health and wellbeing. Take the pharmaceuticals industry, which saw a huge surge in volumes for medicine during the lockdown period. From March to October of this year, Intersoft saw a 109% increase in the number of shipments made by its pharmaceutical customers. Accurate labelling and quick dispatch methods were vital during this time; fortunately, Intersoft’s Intelligent Shipper® solution is robust and flexible enough to instantly respond to these sudden influxes in demand without causing delays.

Solutions that help automate this process not only improve efficiency but remove the risk of error. Intersoft’s Silent Printing, for example, uses a locally installed app to bridge the gap between the retailer’s Intersoft account and the printing hardware, instantly printing the labels to the correct printer and reducing label production times to milliseconds. Scan to print works in a similar way, printing a delivery label and supporting documentation as soon as an item has been picked and scanned at the warehouse.

 


How we helped one pharmaceuticals retailer deliver the goods

Earlier this year, Intersoft was approached by a warehouse automation provider to help it enable the fast and efficient shipment of healthcare products on behalf of a well-established health and beauty retailer. Due to the pressures of Covid-19 the retailer was faced with significantly large shipping volumes and a solution was required that was flexible enough to grow with demand. Intersoft came onboard as an accredited Royal Mail partner to manage the data feed into Royal Mail to seamlessly produce delivery labels and supporting documentation. Thanks to the speed of our Intelligent Shipper solution, a single label could be produced in a fraction of a second, significantly improving despatch speeds.

 


The ones to watch in 2021…

As 2020 draws to a close, all eyes in the eCommerce sector are looking ahead to 2021. With no sign of ‘normal’ life returning anytime soon, the online retail and delivery sectors will still be in high demand and more retailers will need to embrace omnichannel to meet new consumer shopping habits.

The High Street

It will be interesting to see if – even with a vaccine rolled out to the nation – footfall will return to the High Street in 2021? Or will this new wave of converts to online retail, stick with the convenience of eCommerce? If this is the case, we will undoubtedly see more retailers switching to omnichannel in 2021.

We are already seeing significant store closures this year – the demise of the Arcadia Group will be a big blow to many High Streets. Perhaps in 2021, with a new Covid-19 vaccine in place, the face of the High Street will change from filled with fashion retailers to a café culture?

Delivery lockers

In a bid to reduce delivery costs, limit travel miles and remove the inconvenience of failed first deliveries, more and more carriers had been adding delivery lockers and collection points to their delivery models. And demand for this service boomed when the national lockdown ended, with a reported 300% increase in locker use. It will be interesting to see if this level of use continues in 2021 or if the convenience of home delivery will prevent delivery lockers growing further. There is no doubt in their merit, with PUDO (Pick Up Drop Off) options giving the customers the freedom to pick up parcels and drop off returns at a convenient location, while reducing carrier costs.

Brexit

Covid-19 may have dominated the headlines this year, but Brexit will be big news for the UK in 2021. We may have left the European Union already, but new rules and regulations for businesses and consumers won’t come into effect until January 2021. Intersoft’s data shows that 78% of consumers have a greater trust in using the British based postal solution, Royal mail, when shipping to the EU and ROW compared to outsourcing to alternative carriers. And the postal service’s investment in its infrastructure will only serve to bolster this faith in Royal Mail, with two new automated sorting hubs planned for 2022 that will allow it to keep pace with the increased parcel volumes driven by eCommerce.

With the potential for new trade agreements, we may see an increase in shipments made to the Rest of the World. Retailers need to be prepared for the opportunities this brings and partnering with multiple carriers is one way of doing this, allowing eCommerce to pick the most time- and cost-efficient delivery methods for any destination.  Our data shows FedEx, Parcelforce, DHL and DPD are the most popular carriers to ship to the EU and ROW with, accounting for 94% of total shipments.

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